October 9th, 2018 Mortgage Industry Update

The Bank of Canada announced on September 5th that it’s overnight lending rate will remain at 1.50%. The prime rate thus remains 3.70%. Good news for variable rate mortgage holders as they can expect no changes to their rates! The common prediction currently stands at another rate increase for October’s meeting.

Additionally this week:
– Up to 41% of Millennials said they believe that the GTA is well prepared to provide housing for the number of new residents that settle there every year, according to Ipsos poll data by BILD and the Toronto Real Estate Board.

– TREB: Average detached house price dropped 0.6% year over year to about $1 million region-wide in September. Average of $1.34 million in the city of Toronto declined 1.4% compared to September 2017. In 905 down 0.6%. Condo prices up 10% in Toronto region, 6.4% in the 905 areas.

– TREB: Home sales climbed a seasonally adjusted 0.2% from August to 6,455, 1.9% more than 2017. Average home price fell 0.5% from August to $796,786, 2.9% higher than 2017. Benchmark price up just 0.1% on the month to $765,400.

– NAFTA negotiations result in a new United-States-Mexico-Canada Agreement (USMCA), raising the likeliness that interest rate hikes by the Bank of Canada are around the corner. Agreement to be signed later this year.

– RBC Economic Research: Canada’s housing affordability is at its worst level since 1990 and its going to get worse. Was 53.9% in Q2, based on the share of household income required for ownership costs including taxes and mortgage payments. Up from 43.2% just 3 years ago.

– Since June, the sale of $600,000 to $900,000 single-detached homes to first time buyers has increased 22 per cent year-over-year, according to data from RE/MAX INTEGRA.

Stay tuned for the next update!

For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.